Hyper inflation occurs when there's a significant devaluation of currency, mostly over a short period of time.Huh?
The argument for hyper inflation occuring rests on two basic principles: Stimulus and velocity of money.
Stimulus = money priniting; i.e. stimulus checks.
Velocity of money = when you get money, you might go out and spend that money, velocity of money refers to how many times that money changes hands, before being saved or invested. The velocity of money at the moment is historically low, which implies inflation. People aren't spending money, they aren't driving up prices, as a result inflation currently is kept under. With it being historically low the assumption is when people go out and spend their money similar to when they did in 2019 and with more money being printed, then you end up with more inflation; i.e. there's more money in circulation which in the future could drive up inflaiton. It rests on the premise that the central bank hasn't already anticiapted this and that the Fed is just going to let this happen with runaway inflation. In reality as soon as inflation pressure peaks up the Fed would raise interest rates.
Lastly for this all to occur the Fed would not raise interest rates if the economy is still relatively shaky still; i.e. if buisness have all time high debt or if individuals have significant debt loads. Raising interest rates keeps a wrap on inflation because then people have an incentive to invest their money rather than spending it so price pressure ends up being a little bit lower. Increased interest rates help to combat some of that inflation and increased interest rates are ultimately going to drive down growth in the long term because its going to be more expensive for companies to go out and borrow money.
Now, does this argument overall hold any water? The Fed has probably taken all of these issues into account.
The question becomes absent the inflation do governments have any way to pay back their enourmous debt loads? There's no sign to the solution other than holding strong to the national currency and continue kicking the can down the road so to speak. Eventually inflation occurs if there's no stability. You wreck the currency when you destroy the stability and undermine the currency, which is what crypto does.
Hyper inflation, can it be stopped? What causes it? It's caused by a lose of trust in the money. When people lose trust in their currency they start to get rid of it.
Yet lets backtrack a little.
What do people do first when they have a lot of money? Anyone know? Any takers?
They save it, they hold onto it. Which does what?
It causes a depression.
After they don't trust it, they get rid of it as fast as they can. $100 doing the work of $1,000. The velocity gets quicker and quicker. And then governments lose control. At that point you may find yourself moving into hyper inflation. Certaintly very high inflation at very least. Its not just a function of supply, its a function of demand. At a certain point, at a tipping point confidence is lost, the demand for that currency goes down, and they spend it.
What's not clear is at what point does peoples confidence in their currency dissappear? Is it at an inflational rate of 5%, 7%, 10%, 100%?
Ultimately hyper inflation is an occurance resulting in distrust of the currency itself. Essentially pseduo-hyper inflation triggers 'real' hyper inflation, if you can even call it that. If you don't believe in your currency you undermine the integrity of the country on a whole.
When you destroy a currency you destroy a country. it becomes a lose of trust.